Setting aside money is not something which everyone is able to do, particularly as millions deal with the financial impact of the coronavirus crisis. However, for some, saving money for the future is an option at the moment.
- Universal Credit & other benefits may reduce due to DWP back payments
While the Bank of England Base Rate is currently at a historic low of 0.1 percent, and interest rates on a whole host of savings accounts have been cut recently, there is a savings option which still offers a significant bonus to savers.
The Help to Save scheme is available for certain people on low incomes, claiming specific benefits.
Help to Save is a type of savings account, and it is backed by the government so all savings in the scheme are secure, Gov.uk states.
Those who are eligible to get this account can get a bonus of 50 pence for every £1 they save in it over the course of four years.
Savers can put away between £1 and £50 each calendar month in this account.
But, account holders aren’t required to pay in money each month – which could be reassuring to know, in case saving is more difficult in some months than others.
It’s possible to pay the money in as many times as the saver likes, provided it doesn’t exceed the £50 per calendar month limit.
With this account, it’s possible to earn two tax-free bonuses over four years.
Even if the money is withdrawn during this time, the bonuses can still be earned.
After the first two years, the fist bonus will be paid – if the saver has been using the account to save.
This payment will be 50 percent of the highest balance saved in the account.
Then, if it’s been used to continue to save, after four years, the individual will get a final bonus.
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This bonus will be 50 percent of the difference between two amounts, with these being:
- The highest balance saved in the first two years (years one and two)
- The highest balance saved in the last two years (years three and four).
With the £50 per calendar month limit, the most a person can pay in over four years is £2,400 in total.
As such, the most that can be earned via the bonus in four years is £1,200.
Who is eligible for Help to Save?
A person can open a Help to Save account if they are any of the following:
- Receiving Working Tax Credit
- Entitled to Working Tax Credit and receiving Child Tax Credit
- Claiming Universal Credit and their household earned 604.56 or more from paid work in their last monthly assessment period.
Additionally, the saver needs to be living in the UK.
However, there are some exceptions, which Gov.uk explains.
The guidance on the government website states: “If you live overseas, you can apply for an account if you’re either a:
- Crown servant or their spouse or civil partner
- Member of the British armed forces or their spouse or civil partner.”
Even if a person stops claiming benefits, they can keep using the Help to Save account.
However, it is important to look into whether saving money through the Help to Save account could affect eligibility to certain benefits, and how much the person can get.
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